Judgments

Decision Information

Decision Content

T-2736-83
Jacques Beauchamp (Plaintiff) v.
Coastal Corporation and the Ship Wayward Prin cess (Defendants)
Trial Division, Strayer J.—Toronto, March 19; Ottawa, March 26, 1984.
Practice — Pursuant to contract to buy defendant ship, plaintiff tendered purchase price — Defendant corporation unable or unwilling to complete transaction — Plaintiff claim ing specific performance or damages — Ship arrested — Defendants filing confession of judgment in favour of plaintiff for specific performance — Defendants tendering documents to complete sale, but plaintiff not having funds — Plaintiff now moving for judgment for damages and for continued arrest of ship — Plaintiff opposing judgment for specific performance and insisting on right to elect for damages — Plaintiff entitled to plead in alternative — Plaintiff entitled to elect for dam ages if specific performance not carried out — Defendants' application for judgment for specific performance dismissed — Plaintiff cannot elect for damages and later seek specific performance because election for damages amounting to repudiation of contract which cannot later be revived to sustain claim for specific performance — Plaintiff's present applica tion for judgment for damages indicating repudiation of con tract — Plaintiff not entitled to judgment for damages because defendants filed confession of judgment for specific perform ance — R. 405 providing defendant may enter confession of judgment for part of plaintiff's claim — R. 405(3) providing confession not evidence against party making it — Trial of action required and arrest continuing automatically — Feder al Court Rules, C.R.C., c. 663, R. 405(1),(3).
Jurisdiction — Federal Court Trial Division — Maritime law — Defendants arguing action for damages for breach of contract for sale of ship not within Court's jurisdiction over admiralty matters — Action properly under s. 22(2)(a) Federal Court Act giving Trial Division jurisdiction with respect to any claim arising out of claim as to title, possession or ownership of ship — Any matter described in s. 22 involves maritime law which is law of Canada and within Federal Court's jurisdiction — Action also matter necessarily incidental to exercise of Parliament's jurisdiction over navigation and shipping and thus proper subject of law of Canada — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 22(2)(a).
CASES JUDICIALLY CONSIDERED
REFERRED TO:
Antares Shipping Corporation v. The Ship "Capricorn", et al., [1980] 1 S.C.R. 553; (1979), 111 D.L.R. (3d) 289; Tropwood A.G. et al. v. Atlantic Lines & Navigation Company, Inc., [1979] 2 S.C.R. 157; Dobson v. Winton and Robbins Limited, [1959] S.C.R. 775; Widrig v. Strazer et al., [1964] S.C.R. 376; Johnson et al. v. Agnew, [1980] A.C. 367 (H.L.).
COUNSEL:
D. Thomas H. Bell for plaintiff.
R. Geoffrey Newbury for defendants.
SOLICITORS:
Wright & McTaggart, Toronto, for plaintiff.
R. Geoffrey Newbury, Toronto, for defend ants.
The following are the reasons for order ren dered in English by
STRAYER J.: Facts
This is an application by the plaintiff for dam ages, costs, a reference to determine damages, and other incidental relief.
The parties entered into a contract on Novem- ber 8, 1983, whereby the plaintiff was to purchase, for the sum of $475,000, the ship Wayward Prin cess. The closing date was November 16, 1983. On that date the plaintiff tendered the purchase price but the defendant Corporation was unable or unwilling to complete the transaction at that time.
The next day, November 17, 1983, the plaintiff commenced this action seeking specific perform ance of the contract or, in the alternative, damages for breach of contract in the amount of $600,000 with interest from November 16.
On November 18 the ship was arrested in Toronto and so remains.
On February 2, 1984 the plaintiff served the defendants with a notice of application to the
Court for a trial date. The same day the plaintiff's solicitor advised the defendants' solicitor that the plaintiff would no longer proceed with his claim for specific performance. The defendants on Feb- ruary 15 applied to the Court for an order releas ing the Wayward Princess and striking out para graph 10(a) of the statement of claim wherein the plaintiff had sought specific performance. This motion was adjourned until February 27, appar ently in order for the plaintiff's solicitor to seek instructions. When the motion was heard by Reed J. the plaintiff took the position that he now wished to preserve his claim for specific perform ance. His counsel strongly resisted the striking out of the claim for this relief and, on February 28, 1984 Reed J. dismissed the motion to strike and for release of the ship.
Following this decision the defendants on March 7 filed a confession of judgment "in favour of the Plaintiff, Jacques Beauchamp, for specific performance, as claimed in the Statement of Claim". The same day they filed a notice of motion for judgment to be entered against them selves, in favour of the plaintiff, for specific performance. Their solicitors that day also advised the plaintiff's solicitors that they would on March 9 tender to the latter the documents required to complete the purchase and sale. Such documents were presented on March 9 but apparently the plaintiffs solicitors did not have funds from their client to complete the sale. No evidence was pre sented to me to show that the tender was other than complete as to its documentation.
The plaintiff in turn on March 15 launched this motion for a judgment in his favour for damages as claimed in paragraph 10(b) of the statement of claim, and for the continued arrest of the ship or some equivalent security. Both motions were heard together by me on March 19. At that time the plaintiff opposed judgment being entered in his favour for specific performance and insisted instead on his right to elect for damages. The defendants contended that the plaintiff was now rejecting specific performance and had elected for a remedy which the Federal Court has no jurisdic tion to give, damages for breach of contract of sale of a ship not being within admiralty jurisdiction.
I will deal at this stage with the issues concern ing the rights of action that are available as this may be relevant as to the continuing validity of the arrest.
Conclusions
I have reached the following conclusions.
1. I accept that the plaintiff is entitled to plead in the alternative as he has done, seeking either specific performance or damages. See Dobson v. Winton and Robbins Limited, [1959] S.C.R. 775; Widrig v. Strazer et al., [1964] S.C.R. 376; Johnson et al. v. Agnew, [1980] A.C. 367 (H.L.).
2. I also accept that plaintiff is entitled, though he may have pursued specific performance even as far as obtaining judgment for that remedy, to elect later instead for damages if specific performance has in fact not been carried out. (See the cases cited above.) The election is his and a defendant cannot force him to choose specific performance alone as the defendants have tried to do here. For that reason I am dismissing the defendants' application that a judgment for specific performance be entered against them.
3. I have found no authority, however, for the converse proposition that a plaintiff may first elect damages and then later seek specific performance, and I do not think it is sound law. The reason one may first elect specific perform ance and later elect damages is that specific performance is based on the continued existence of the contract. So specific performance having failed, the plaintiff can at that time repudiate the contract and seek damages instead. But if he has first clearly elected for damages, in my view he cannot later claim specific performance because the election for damages amounts to a repudiation of the contract which cannot later be revived to sustain a claim for specific performance. As explained in Sharpe, Injunc-
tions and Specific Performance (1983), para graphs 776-777:
Where the promisee decides to claim damages, he is said to "accept the breach". His election is to treat the contract as having been broken at the point of breach and in effect, to discharge the promisor from any further contractual obliga tion other than to pay damages.
The accepted position is that subsequent insistence upon specific performance is inconsistent with the acceptance of the promisor's breach. The effect of acceptance, or the assertion of a damages claim, is to discharge both parties from further performance, and hence, specific performance is no longer possible.
I have concluded therefore that while the defendants cannot force the plaintiff here to accept specific performance, the plaintiff has by opposing a judgment in his favour for specific performance and by applying at the same time for judgment for damages has in the clearest possible way indicated that he has chosen to treat the contract as repudiated by a fundamen tal breach.
The only remedy left to him is damages. Even if this were not the position at law, this would be an obvious case for the equitable discretion to be exercised against a grant of specific perform ance.
4. While the plaintiff contends that he is now entitled to a judgment for damages because of the confession of judgment filed by the defend ants on March 7, I do not agree. The confession of judgment was with respect to an order for specific performance. Rule 405 [Federal Court Rules, C.R.C., c. 663] says that a defendant may enter a confession of judgment "for a part or the whole of the plaintiff's claim". The defendants here have offered a confession of judgment of the claim in paragraph 10(a) of the statement of claim, but not of that in paragraph 10(b). The plaintiff has not accepted it. By Rule 405(3) the confession is not evidence against the party making it. Therefore the plaintiff cannot
rely on it in any way in order to obtain a judgment for damages.
5. I have concluded that the plaintiff can, how ever, proceed with his action in this Court for damages. It was contended that by virtue of the Federal Court Act [R.S.C. 1970 (2nd Supp.), c. 10] and the Constitution this Court has no jurisdiction to deal with such a claim for breach of contract for the sale of a ship. Unfortunately this aspect of the matter was not argued at length or exhaustively. I have concluded that such a claim comes within paragraph 22(2)(a) of the Federal Court Act which says that the Trial Division has jurisdiction
22....
(2) ... with respect to any claim or question arising out of one or more of the following:
(a) any claim as to title, possession or ownership of a ship ... or with respect to the proceeds of sale of a ship .. .
When this Court can order the arrest of a ship because of a dispute over a contract for pur chase of the ship, and can order specific performance of such a contract (see e.g., Antares Shipping Corporation v. The Ship "Capricorn", et al. [[1980] 1 S.C.R. 553]; (1979), 111 D.L.R. (3d) 289, it surely can give an alternative or additional remedy with respect to the same parties, the same ship, the same contract, and the same breach. In the words of paragraph 22(2)(a) of the Act, this must be a "claim or question arising out of" a "claim as to title, possession, or ownership". In general, it is settled law that any matter described in section 22 of the Federal Court Act involves maritime law which is a law of Canada and thus a basis for the exercise of jurisdiction of this Court. (See the Antares case supra; Tropwood A.G. et al. v. Atlantic Lines & Navigation Com pany, Inc., [1979] 2 S.C.R. 157.) This is also a matter necessarily incidental to the exercise of Parliament's jurisdiction over navigation and shipping and is thus a proper subject of a "law of Canada". Any other conclusion would lead to great inconvenience which, if not unknown in
our constitutional jurisprudence, should never theless be avoided if possible.
6. Judgment therefore cannot be obtained with out a trial as matters now stand. The arrest will automatically continue and it remains for the parties to make such arrangements as they can agree upon with respect thereto, or to come back to the Court for a further order in that respect after they have further considered their respec tive positions.
7. Given the divided success in these motions and the bizarre pattern of events that have led to them, no costs should be awarded.
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